Quebec pension ruling ‘comforting’: Lawyer

Province now on board with rest of country for MEPPs
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 05/02/2008

A recent decision by the Quebec Court of Appeal has brought Quebec in line with other provinces when it comes to multi-employer pension plans (MEPPs). The case concerned a partial withdrawal from the plan and whether member benefits could be reduced when contributions are not sufficient to pay them.

After years of dispute, the April 2 ruling stated when a pension plan is not 100-per-cent solvent on a going-concern basis upon termination, the benefits of the members are reduced accordingly.

“This decision is rather comforting for employers in Quebec,” said Philippe Lacoursière, a lawyer with McCarthy Tetrault in Montreal. “Before, unlike anywhere else in the country, Quebec legislation and courts didn’t allow reduction of benefits if an employer was lacking funds. So there was always a bit of concern in multi-employer pension plans from companies from other provinces to join in, when there was a company from Quebec, because there was always a bit of a risk. They were afraid, in case of lack of funding, they would have to kick in to compensate.”